Clinton signs Digital Signatures Bill

With a ceremonial pen and then with a digital "smart card", President Clinton on Friday signed the long-awaited and landmark legislation that gives most computer-generated signatures the same legal weight as ones signed on paper.

The president signed the bill this morning in Philadelphia's historic Congress Hall, which served as the meeting place for the US Congress from 1790 to 1800.

"Two hundred and thirteen years ago, about 100 feet from where we are now, in a summer as hot as this one, the Founding Fathers drafted the Constitution of the United States," Clinton said. They included language in the Constitution forbidding the new government from enacting laws that would impair the creation of contracts between individuals and businesses, he noted.

The new digital signatures law "carries the spirit of the Founders' wisdom into the Information Age", Clinton said. He added that the Electronic Signatures in Global and National Commerce Act -- as the bill is officially known -- will "open up new frontiers of economic opportunity while protecting the rights of American consumers".

Clinton initially signed the bill in the traditional way, using a pen on paper, to make it legal under existing law. Then he moved to a specially set-up computer and slid a personalised digital "smart card" through a card reader to put his signature digitally onto an electronic copy of the bill. After a few seconds of waiting, confirmation of the president's digital signature appeared on the screen of a computer attached to the reader.

Before going to the president for his signature, the bill was approved by the House of Representatives on June 14 and by the Senate two days later. Their votes followed months of political wrangling and attempts to forge a compromise between different versions of the measure that the two bodies had separately approved.

The new law requires that consumers be free to choose whether or not they want to receive documents electronically. It also stipulates that consumers and businesses must be provided with the proper software to ensure that the electronic documents can be received, opened and read by them to make the documents legally binding.

The law takes effect on October 1. Supporters say it will have a huge effect on business-to-business e-commerce by speeding up the ability of companies to do business with one another through online procurement exchanges and electronic marketplaces.

Currently, companies that buy supplies, submit bids or cut deals via the internet have to follow up later by sending paper documents to be signed manually. With digital signatures, industry analysts said, they should be able to immediately execute documents online without having to send faxes or overnight letters.

David Butler, a spokesman for Washington-based Consumers Union, a consumer advocacy group that supported the digital signatures bill, said today's action by the president puts the burden on the computer industry to ensure that reliable and secure technologies are made available to allow electronic signatures to be widely used.

The law doesn't stipulate what technologies can be used but leaves the door open for innovation. "The challenge will be for industry to devise a system that ensures (individuals') private information will be kept private," Butler said.

However, some opponents of the new law continue to criticise it, saying the measure doesn't include enough protections to ensure that consumers will be able to avoid becoming the victims of fraud through the use of illegally obtained or counterfeited digital signatures.

"We think identity theft is going to go through the roof because of this," said Margot Saunders, managing attorney for the Washington office of the National Consumers Law Centre. "I would advise consumers not to agree to (the use of) electronic signatures unless they are biometrically produced." That process would require the use of a physical signature with a stylus on an electronic pad, retina identification or other unique and positive means of identification, she added.

Some documents still won't be able to use digital signatures under the new law, including foreclosure notices on primary homes, insurance cancellation notices and documents related to adoptions and other family law matters.

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